"In light of the high quality of Extract Resources's Rossing South uranium project in Namibia - adjoining Rio Tinto's Rossing mine - there is obviously plenty of corporate interest in the $2.4 billion company.
However, Extract has made clear that while it is interested in strategic partnerships to help develop the $US704 million ($768 million) mine, which could produce 6800 tonnes of uranium a year, it is not looking to be taken over.
Extract has a very concentrated register. Kalahari Minerals of London, now in effect a holding company, owns a 40.9 per cent stake, Rio Tinto owns 15.1 per cent and Polo Resources of London owns 10 per cent.
There are suggestions that as part of the search for a strategic partner, led by Rothschild, the parties that have signed confidentiality agreements have also agreed to standstill arrangements preventing them from buying Extract shares.
Rio is believed to be among those interested in a partnership, because there are obvious cost savings available due to the proximity of Rossing South to the Rossing operation. The Rossing South ore has a higher grade than the material Rio is processing.
Extract will have plenty of uranium to sell once Rossing South enters production in 2013, so its primary concern in a joint venture is being able to place the material with customers rather than raising the funding for construction.
In recent months the uranium miners Uranium One and Denison Mines have partnered with a Japanese consortium and Korea Electric Power respectively for funding and offtake partnerships.
Extract's potential product is already said to have attracted interest from uranium buyers in China, India, South Korea and Japan, so miners may not be the only ones taking part in the search for a partner. Extract is targeting a resource of at least 227,000 tonnes, which would make it the second-largest uranium deposit in the world behind BHP Billiton's Olympic Dam."
EXT Price at posting:
$9.94 Sentiment: LT Buy Disclosure: Held
A personalised tool to help users track selected stocks. Delivering real-time notifications on price updates, announcements, and performance stats on each to help make informed investment decisions.
(20min delay)